Accrued income scheme for gilts (UK)
Under the accrued income scheme, a transfer of a gilt or similar security between interest dates can give rise to an accrued income profit or relief reflecting interest attributable to the holding periods. For an ordinary transfer with accrued interest, the seller can be taxed on the accrued amount and the purchaser may receive corresponding relief. Ex-dividend transfers, exemptions and other conditions require separate treatment.
Worked example
A seller transfers a gilt with accrued interest of £120 included in the price; the purchaser receives the next coupon. Assuming the scheme applies and no exception, the seller considers £120 accrued income and the purchaser corresponding relief under the rules.
Common mistake
Treating the entire sale consideration as a capital gain and ignoring accrued interest, or assuming the same result for every ex-dividend transfer.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |